Business Loan Application

Smaller and younger businesses may find it difficult to obtain financing from financial institutions. These businesses often lack operating track record and are seen to have greater risk of failure.

To enhance the business' attractiveness and its chance to borrow, these businesses have to build growth track record and be able to convince the financier of its creditability. Understand what your financiers are looking for and start preparing from the day the business commence business.

In preparation for a business loan application:-

(a) Business must illustrate that it has

good banking conduct, as simple as ensuring that there is always adequate cash balances and no record of bounced cheques;
have good credit history, which applies to both the business and the business owners; and
no past or current litigation that will adversely affect the business reputation or going-concern.

(b) Help your financier understand the past business performance, business potential and risk profile of the business

providing good quality historical financial statements, preferably audited, and up-to-date management accounts and provide explanation on what drives business performance;
have a concise and well thought-through business plan that explains the business growth, the amount of loan required, the use of the money and the projected financial statements; and
have a robust financial model that can illustrate the business' ability to generate cash flow and fulfill loan repayments.

the business is supported by capable management team and its survival is not dependent on a single person; and
the business has adequate controls, good corporate governance and risk management capabilities.

Qualifying SMEs can also seek government assisted loans under the following schemes:

(a) Local Enterprise Finance Scheme (LEFS)

(b) Micro Loan Programme (MLP)

Download a checklist to guide you in the preparation of basic document which are typically required in a business loan application.

Qualifying SMEs can also seek government assisted loans under the Enterprise Financing Scheme.